Alcohol Tax Increases Deter Drinking

January 14, 2009

As leaders of many national, state and local governments debate whether to raise taxes on alcohol to boost revenues, their decisions also could influence how much their constituents imbibe in coming years, say University of Florida researchers.

In a study published online (January 15) in the journal Addiction, UF researchers report that, the more alcohol costs, the less likely people are to drink it. And when they do drink, they drink less, a concrete association researchers documented after analyzing 112 studies spanning four decades.

“Results from over 100 separate studies reporting over 1,000 distinct statistical estimates are remarkably consistent, and show without doubt that alcohol taxes and prices affect drinking,” said Alexander C. Wagenaar, Ph.D., a professor of epidemiology and health policy research at the UF College of Medicine and the senior author of the study. “When prices go down, people drink more, and when prices go up, people drink less.”

The consistency of this association between cost and consumption indicates that using taxes to raise prices on alcohol could be among the most effective deterrents to drinking that researchers have discovered, better than law enforcement, media campaigns or school programs, said Wagenaar.

The study, funded by the Robert Wood Johnson Foundation, also determined that tax or price increases affect the broad population of drinkers, including heavy drinkers as well as light drinkers, and teens as well as adults.

Many studies have analyzed how tax or price increases affect people’s drinking habits, but the UF study is the first to examine all of these findings as a whole, using a statistical procedure called meta-analysis. This technique allows researchers to draw conclusions that are not limited to specific policy changes or a single state or country, said Wagenaar.

Researchers scoured through decades of studies examining links between price and alcohol use. The studies were all reported in English, but not limited to any single country. The data resulting from these reports were compiled and analyzed to glean more precise answers than can be obtained from just one study, Wagenaar noted.

In a commentary in the same issue of Addiction, Frank Chaloupka, Ph.D., a professor of economics at the University of Illinois at Chicago, describes the research as a “true tour de force,” and adds, “these findings provide a strong rationale for using increases in alcoholic beverage taxes to promote public health by reducing drinking.”